The co-op over XBox Live for Monster Madness refers to the Monster Dojo, where you can start from level 1 and see how long you can survive.

There's an achievement (A Little Help Goes A Long Way) for the Dojo to survive up to Level 100. HINT: You can start at level 50 and it still unlocks. This is much easier with 4 people with 1 sec respond time.